Regular Session
Railroad Commission of Texas (RRC)
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This bill's path through the Texas Legislature
BILL ANALYSIS |
| H.B. 4042 |
| By: Morales, Eddie |
| Energy Resources |
| Committee Report (Unamended) |
| BACKGROUND AND PURPOSE Under current law, the Railroad Commission of Texas (RRC) may regulate the safety of gas pipeline systems and collect annual safety and regulatory fees from operators of these systems. The bill author has informed the committee that the relevant sections dealing with the pipeline safety refer only to "natural gas" distribution pipelines and pipeline facilities in key definitions and regulatory provisions and do not include propane distribution systems. H.B. 4042 seeks to address this issue by removing the term "natural" from various definitions and provisions to ensure that propane gas distribution systems fall under the RRC's pipeline safety oversight and fee collection authority.
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| CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
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| RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
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| ANALYSIS H.B. 4042 amends the Utilities Code to remove the specification that gas is natural gas with respect to the following: ·gas distribution pipelines, gas master metered pipelines, gas distribution systems, and gas master metered systems whose operators may be subject to annual pipeline safety and regulatory fees; and ·a distribution gas pipeline facility subject to statutory provisions relating to the installation, removal, and replacement of certain pipelines and statutory provisions relating to pipeline incident reporting and records.
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| EFFECTIVE DATE September 1, 2025.
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| H.B. No. 4042 | ||
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| relating to the applicability of certain safety provisions and | ||
| regulatory fees administered by the Railroad Commission of Texas to | ||
| gas distribution pipelines. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Sections 121.211(a), (d), (e), and (g), | ||
| Utilities Code, are amended to read as follows: | ||
| (a) The railroad commission by rule may adopt a fee to be | ||
| assessed annually against operators of [ |
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| pipelines and their pipeline facilities and [ |
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| metered pipelines and their pipeline facilities subject to this | ||
| title. | ||
| (d) The commission may assess each operator of a [ |
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| gas distribution system subject to this title an annual fee not to | ||
| exceed one dollar for each service line reported by the system on | ||
| the Distribution Annual Report, Form RSPA F7100.1-1, due on March | ||
| 15 of each year. The fee is due March 15 of each year. | ||
| (e) The railroad commission may assess each operator of a | ||
| [ |
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| fee not to exceed $100 for each master metered system. The fee is | ||
| due June 30 of each year. | ||
| (g) Each operator of a [ |
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| each [ |
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| surcharge to its existing rates the amounts paid to the commission | ||
| under this section. Amounts collected under this subsection by an | ||
| investor-owned [ |
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| cooperatively owned [ |
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| included in the revenue or gross receipts of the company for the | ||
| purpose of calculating municipal franchise fees or any tax imposed | ||
| under Subchapter B, Chapter 182, Tax Code, or under Chapter 122. | ||
| Those amounts are not subject to a sales and use tax imposed by | ||
| Chapter 151, Tax Code, or Subtitle C, Title 3, Tax Code. | ||
| SECTION 2. Section 121.213(a), Utilities Code, is amended | ||
| to read as follows: | ||
| (a) In this section, "distribution gas pipeline facility" | ||
| means a pipeline facility that distributes [ |
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| to end-use customers. | ||
| SECTION 3. Section 121.214(a)(1), Utilities Code, is | ||
| amended to read as follows: | ||
| (1) "Distribution gas pipeline facility" means a | ||
| pipeline facility that distributes [ |
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| use customers. | ||
| SECTION 4. This Act takes effect September 1, 2025. | ||
| TO: | Honorable Drew Darby, Chair, House Committee on Energy Resources |
| FROM: | Jerry McGinty, Director, Legislative Budget Board |
| IN RE: | HB4042 by Morales, Eddie (Relating to the applicability of certain safety provisions and regulatory fees administered by the Railroad Commission of Texas to gas distribution pipelines.), As Introduced |
| Source Agencies: | 304 Comptroller of Public Accounts, 455 Railroad Commission |
| LBB Staff: | JMc, RStu, MW, JOc |
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Common questions about HB4042
HB4042 expands the Railroad Commission of Texas (RRC) jurisdiction by removing the "natural" gas qualifier from the Utilities Code, effectively subjecting propane and other non-natural gas distribution systems to state safety fees and reporting requirements. Operators of propane distribution pipelines and master-metered systems (e. g.
HB4042 was authored by Texas Representative Eddie Morales during the Regular Session.
HB4042 was signed into law by Governor Greg Abbott on June 22, 2025.
HB4042 is enforced by Railroad Commission of Texas (RRC).
The compliance urgency for HB4042 is rated as "critical". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
The cost impact of HB4042 is estimated as "low". This may vary based on industry and implementation requirements.
HB4042 addresses topics including fees & other nontax revenue, fees & other nontax revenue--state, safety, utilities and utilities--general.
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